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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title The asset reallocation channel of quantitative easing. The case of the UK
Organization Unit
  • Simone Giansante
  • Mahmoud Fatouh
  • Steven Ongena
Item Subtype Original Work
Refereed Yes
Status Published in final form
  • English
Journal Title Journal of Corporate Finance
Publisher Elsevier
Geographical Reach international
ISSN 0929-1199
Volume 77
Page Range 102294
Date 2022
Abstract Text We investigate the impact of the Bank of England's asset purchase program (APP) on the composition of assets of UK banks with unique data on the received reserves injections. The Monetary Policy Committee (MPC) didn’t expect there to be strong transmission of the APP’s impact through the bank lending channel. We find that compared to the control group, treated banks reallocated their assets towards lower risk-weighted investments, such as government securities, but did not provide more credit to the real economy. Overall, our findings suggest that when banks are not adequately capitalised, risk-based capital constraints can limit the effectiveness of expansionary unconventional monetary policies and provide incentives for carry trade activities.
Official URL
Digital Object Identifier 10.1016/j.jcorpfin.2022.102294
Other Identification Number merlin-id:22791
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